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Sunday, July 29, 2012
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NGO pockets vital healthcare fund

Investigation reveals at least $1.9m withdrawn through forged documents

A Bangladeshi non-government organisation has misappropriated an international grant of nearly $1.9 million, meant to fight AIDS and tuberculosis, through fabricated bank statements, cheques and accounting journals.

According to a probe report of The Global Fund to Fight AIDS, Tuberculosis and Malaria, Padakhep Manabik Unnayan Kendra diverted the money in 2004-09 and tried to justify the withdrawals with fake and forged documents.

The report, released on July 11, said the withdrawals -- about 52 percent of the total $3.62 million fund disbursed to the NGO -- never took place. The organisation maintained false bank account numbers to conceal the fund diversion.

The Global Fund, which so far has provided $82 million to ministries and NGOs in Bangladesh to tackle the deadly diseases, said the misappropriated amount might be even more. The report recommended recovering the loss from Padakhep.

The Global Fund, an international financing institution, has so far committed $22.6 billion in 150 countries to support large-scale prevention, treatment and care programmes.

The report reads Padakhep made significant efforts to conceal the fund diversion by fraudulently maintaining manufactured records to justify the withdrawals that never actually happened.

The fabricated papers include false bank statements and cheques, accounting journals in fictitious programmes and activities and invoices for made-up purchases.

“Vendors who allegedly provided goods and services under the programme also confirmed in several instances that the bids, invoices, and cheques bearing their companies' names were not authentic and that the vendors never provided the goods or services and they never received the funds,” explains the report, prepared after a year-long investigation by the Office of the Inspector General (OIG) of The Global Fund.

Exposure of some financial irregularities of Padakhep in two AIDS prevention projects financed by The Global Fund in mid-2009 led the donor into conducting the investigation.

Save the Children, a globally active NGO and also the principal recipient of The Global Fund money, had appointed Padakhep as the sub-recipient. It found irregularities while monitoring the project implementations.

Save the Children ended its contracts with Padakhep on November 24 last year.

Padakhep challenged the contract termination and is now in a legal battle with Save the Children. It even claimed $14.23m in damages.

According to the report, Padakhep held its funds with NCC Bank between November 2004 and December 2009. Later, it moved its accounts to Dutch Bangla Bank.

The OIG investigation team found that Padakhep had concealed the genuine bank statements maintained at the NCC bank and instead created and produced its own versions of statements, which were in fact fictitious.

The NGO often reported different account numbers on its forged bank statements than the NCC Bank actually used. Padakhep produced falsified bank statements and provided those to Save the Children in order to back the expenditures, the report says.

The report used scanned copies of the genuine and fake banks account numbers. It drew a comparison that proved bank statements provided by Padakhep and those of NCC Bank were not the same. The amounts and dates of fund withdrawals were also different in the genuine and fake bank statements.

The OIG team showed the versions of bank documents provided by Padakhep to senior NCC Bank officials who confirmed that the statements were not issued by the bank. However, the probe body did not find evidence of the practice in DBB Bank accounts.

To maintain consistency between the false bank statements and supporting documentation, Padakhep created, produced and utilised extensive and elaborate false documentation to support fabricated bank statements, and conceal the actual nature of its expenditures.

The accounting journals reflected the transactions in the forged statements.

The OIG in its report placed an accounting journal page and the corresponding genuine and fraudulence bank statements. A transaction of Tk 61,700 for a workshop described in the accounting journal appeared in both genuine and false statements, but a withdrawal of Tk 35,000 was only in the false bank statement.

The OIG team said the amount of Tk 35,000 had never actually been withdrawn.

Padakhep has been working in the fields of micro-credit, education, health, agriculture and environment for 25 years with funds from various international donors. At present, it is running 32 projects all over Bangladesh.

VERSIONS OF PADAKHEP
Terming the report one-sided, Padakhep Executive Director Iqbal Ahammed said Save the Children, being the principal recipient of the fund, was equally responsible if anything happened since it supervised, monitored and audited the project activities.

“Padakhep can't do anything through bypassing Save the Children and its staff. If anything happened then that should have been come out at the time of the happening, but Save the Children had no objection to our activities then,” he said, accusing the OIG of not taking and including its comments in the report.

Asked how he could deny the proof of forgery and fraudulence to conceal a misappropriation of funds, Iqbal Ahammed said that while many points of the report were not correct, they needed to verify the images and the proof used in the report.

“Padakhep is going to challenge the report. We have serious comments on the report, but will not give that since the matter is now before a tribunal,” he told The Daily Star.

REACTION OF SAVE THE CHILDREN
The OIG report clearly establishes that Padakhep has misappropriated not less than $1.89 million of donor funds intended to fight the scourge of HIV and AIDS in Bangladesh, said its Country Director Michael McGrath through an email.

He said the report was the result of more than a year of intensive investigation, involving discussions not only with Padakhep and its bank, but also with health ministry officials and principal and sub-recipients of The Global Fund grants.

“The evidence is overwhelming. Padakhep has been provided with an opportunity to comment on the draft report. If the OIG did not incorporate the changes requested by Padakhep, I can only assume that it was because they were not convinced as to the accuracy or truthfulness of the information provided by Padakhep,” said McGrath.

He termed Padakhep's claim that the principal recipient shared equal culpability for the fraud as absolutely “outrageous”.

“If a criminal is caught by the police and charged with serious crimes, would we say that the police were equally responsible for the crimes committed, because it took them some time to identify the culprit and assemble the evidence?”

The only reason why Padakhep is seeking to prevent public discussion of the OIG report is that they do not want the people, the government and the donors to know the details of the donor fund misappropriation which they have been responsible for over an extended period of time.

Instead of taking action against the NGO, the health ministry has recommended that Padakhep undertake a Tk 24 crore project fighting HIV/AIDS.

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As the government is not completely corruption free, so the NGOs are following suit. This is due to lack of discipline in the government.

: Anonymous

We can fool all the people sometimes. We can fool some people all the time. But, we cannot fool all the people all the time.

: Maurice Peterson

Comments

  • upfront
    Sunday, July 29, 2012 03:26 AM GMT+06:00 (125 weeks ago)

    There is nothing to balance the balance sheet; the NGO's are more favorite than the government by many in the political world today. I would be very difficult to identify highly popular in the media and counted as elite of the society and member of the civil society, not enjoying the benefit of the NGO culture set up since liberation to use private channels for help to the countless poor in Bangladesh.

    The idea is definitely wise and supportable but only issue cropping up repeatedly their role in politics. Try to find the ways to make the NGO corruption-free and keep away from politics. The TIB should do some annual reporting in their corruption enterprise, again foreign funding is a major source of TIB's survival.

  • Mushahid Ahmed Chowdhury
    Sunday, July 29, 2012 10:19 AM GMT+06:00 (125 weeks ago)

    The Anti Corruption Commission (ACC) may take up the case. If the NGO is found guilty, exemplary punishment for such crime should be ensured. The incident will definitely have a negative impact over funding of the projects run for the improvement of the socioeconomic condition of our people.

  • Sabuj Sen
    Sunday, July 29, 2012 07:32 AM GMT+06:00 (125 weeks ago)

    These NGO's are registered with the NGO bureau. Chartered Accountant Firms audit them every year. Audit requirements are extensive. However, in collaboration with some NGO bureau officials, a few auditors are providing cheap audit certifications. If the cash and bank reconciliation was audited by the auditors, this should not have happened. You need to tell us, who was the auditor and in which firm and what the NGO bureau is going to do about it?

  • Afzal Akram
    Sunday, July 29, 2012 06:00 PM GMT+06:00 (125 weeks ago)

    This is now become very common in Bangladesh. I heard some incidents of misappropriating money in a health project run by Bangladesh Government and funded by World Health Organization. The project titled Demand Side Financing Project (DSF) is now running over 50 more upazilas in the country. It is alleged that the government staff are misappropriating money which is allocated for the poor pregnant mothers as there is no monitoring personnel from WHO. The poor mothers are depriving from getting benefits due to proper monitoring, though government high ups and WHO are very much keen to help the mother.

  • Rahman
    Sunday, July 29, 2012 09:29 AM GMT+06:00 (125 weeks ago)

    While I applaud the action against the NGO in Bangladesh; I also blame the Global Funds and Save the Children for directly encouraging corruptions by not checking the facts and figures of AIDS/HIV needs our poor nation.

    They never should have provided such large amount of funds to this NGO or any NGO in Bangladesh for a disease HIV/AIDS that never been and/or likely to be a serious threat in Bangladesh. And it is really sad that funds are throwing away that generously donated funds by people in such fashion; especially; these funds could have been better used for some other disease within this country. So the Global Funds and Save The Children is in complicit to this sham. Please check the statistical records of the AIDS/HIV cases for the last 30 years in Bangladesh, and you get the real picture.

  • Asad
    Sunday, July 29, 2012 09:39 AM GMT+06:00 (125 weeks ago)

    The government should keep the 24 crore on hold until the trial is finalised and a verdict comes out from the court. It is a shame that many national organisations are involved in fraudulent activities.

  • MH Uddin
    Sunday, July 29, 2012 12:49 AM GMT+06:00 (125 weeks ago)

    The matter is now in court and both parties are claiming them clean chit. Before coming out the final outcome from the tribunal, it's not cleaver to report the issue in such a clear way.

  • OpeeMonir
    Sunday, July 29, 2012 01:07 AM GMT+06:00 (125 weeks ago)

    Would it be possible for RAB to hunt down these people who are involved in this despicable crime and bring them down through justice? These are criminals we should be going for in a country where resources are so minimum for poor people's health care and government has never be successful in doing so. I hope this is not hoax news to undermine the NGOs at the same time.

  • zahed hasan
    Sunday, July 29, 2012 01:09 AM GMT+06:00 (125 weeks ago)

    This NGO should be punished. Govt should take action against them.Need to investigate the other sub recipients account.

  • shimul
    Sunday, July 29, 2012 01:10 AM GMT+06:00 (125 weeks ago)

    ngo should be kept under close concentration. many ngo helps militant under their good face

  • Hafeejul Alam
    Sunday, July 29, 2012 12:43 PM GMT+06:00 (125 weeks ago)

    What is NGO Bureau of the government is doing? The ACC also should step in and thoroughly investigate the matter and publish the findings before taking necessary action.

  • A. Rahman: Australia
    Sunday, July 29, 2012 08:26 AM GMT+06:00 (125 weeks ago)

    The Global Fund to Fight AIDS as well as Save The Children for giving funds to this Bangladesh NGO Padakhep for fighting AIDS in Bangladesh; there is no need for this program in Bangladesh; we are not like India where AIDS is a big problem; but our cultural and religious; together with social behaviors will stop AIDS to spread. Check the figures on AIDS patients last 30 years; and you will see these big International NGOs breading corruptions in our country by providing money for these programs un-necessarily.

  • MdFazlurRahman
    Sunday, July 29, 2012 01:06 PM GMT+06:00 (125 weeks ago)

    This is very sad that some NGOs are not understanding about the responsibilities of benevolent funding rather they think the received money is their own and they can do any thing they like. So the responsible criminals should be caught strictly and punish exemplary as other persons can not dare to do such in future.

  • suahmed
    Sunday, July 29, 2012 03:16 AM GMT+06:00 (125 weeks ago)

    It is a well known fact that any such global fund channelized to NGOs through Govt. agencies requires a lot of fund as bribe to appease the Govt. high ups. So NGO that receives fund has to make fabricated accounts. This way NGOs have been made corrupted.


 

 


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